The advent of low cost microprocessors and microcomputers for use in "intelligent" data terminals and lower costs and improved efficiency of computer systems in general has resulted in an ever increasing number of applications for unattended credit operations, such as automatic computerized bank "tellers", unattended bulk terminal fuel dispensing systems and the like. Such systems usually are operated in response to the entry of an authorized credit card having variable data encoded on it to identify the user, the types of products or extent of credit to which he is entitled, and other variable information required by the particular system with which the card is used. Usually the credit card is inserted into a card reader. Then variable data relative to the specific transaction desired by the user is entered by means of a keyboard or other acutating devices to cause the system to perform the desired operation.
To permit repeated usage of the credit cards or authorization cards in such systems, data is generally encoded in the cards in the form of binary encoded perforations or magnetically encoded information, or the like. A typical card reader is a photoelectric card reader which responds to the passage of light through selectively encoded holes in pre-established positions on the card to initiate and control operation of the system with which such a card reader is used. Mechanical switches also can be employed, and systems have been developed for similarly reading magnetically encoded binary data from laminated plastic credit cards into which permanently magnetized magnets or slugs of magnetic material are placed at the different binary data code positions.
Cards for use in these various readers are typically the same size as the conventional credit cards in widespread use throughout the world today. Since these cards often are used in conjunction with terminals of systems where no attendant is on duty (such as 24 hour automatic bank teller machines, or unattended bulk fuel systems), steps must be taken to prevent counterfeit or unauthorized cards from enabling the system controlled by the card reader for use. In the case of cards which initially have been authorized for use in the system, but where there is a credit problem or some other reason for preventing such a card from operating the system, a card verification system such as the type disclosed in the patent to John Kubina, Patent No. 4,114,140, issued 9/12/78 has been developed. This type of system, however, does not provide protection against the use of a counterfeit card which otherwise has a valid address or user indicia on it, since such a card could pass the verification check provided by the system disclosed in the Kubina patent.
The problem of providing security for punched hole card readers is readily apparent since perforation patterns, properly located, easily can be made in plastic or cardboard cards or card blanks. Such counterfeit patterns may be simply based on the shape and code pattern fields of valid cards produced for use with the system. Counterfeiting is more difficult with laminated cards in which a center lamination has permanent magnets or permanently magnetized material located in different positions to provide the desired binary encoded data. The encoding of data with small permanent magnets, however, is relatively expensive; and the card reader used to decode or read the magnetically encoded data also is of greater complexity and cost than a simple photoelectric or bent wire switch card reader. For this reason, the photoelectric and bent wire switch readers are preferred and are in widespread use.
Therefore it is desirable to provide a relatively inexpensive security system for use with photoelectric or bent wire card readers which permits the reading of authorized cards in a system but which prevents the card reader for being enabled when a counterfeit or unauthorized card is inserted into the reader. Such a security system should be one which is concealed, both in the reader and in the card, and which makes the counterfeiting of cards difficult to accomplish without specialized manufacturing equipment.